Bancomext, a state-owned bank and export credit agency in Mexico, has obtained a US$600mn credit facility from a syndicate of international banks that will support its response to Covid-19.

Squire Batton Boggs, the law firm that represented Bancomext, says the facility will support the bank’s funding strategy “amid a sharp contraction in export revenues, which account for nearly 40% of Mexico’s GDP”.

“It will also provide working capital to companies across key exporting sectors of the Mexican economy, including the automotive, aeronautic, transport and logistics, tourism, manufacturing, construction and agriculture industries,” it says.

Norton Rose Fulbright represented Banco Santander, Citibank and Commerzbank, the three banks that took part in the syndicate.

The facility is guaranteed by the Multilateral Investment Guarantee Agency (Miga), a member of the World Bank Group.

Miga says that as well as support exporters looking to recover from the effects of the pandemic, the facility will provide “much needed working capital” to help Mexican companies preserve employment, pay expenses and pay invoices to maintain healthy supply chains.

Alvaro Mestre, chair of the Mexico desk at Squire Patton Boggs, describes the loan as a “historic and unique undertaking at a critical point in time when Mexico’s economy requires stimulus measures”.

For Mexican businesses, the pandemic hit at a challenging time. US think tank CSIS says the country’s economy had already contracted by 1.6% over the course of 2019 – before the virus had been detected – and that was accompanied by a steady fall in private investment.

This year, the Mexico’s economic response “is among the world’s most frugal”, CSIS says, when measured as relief spending as a percentage of GDP.